The Summer Budget 2015
Implications for the FE and Skills
sector
Beej Kaczmarczyk, Learning Curve Group
The main themes
Eliminate the budget deficit while increasing
spending on defence, health and pensions
Reductions in other departments’ spending
Reward work and build aspirations
New national living wage
Back business and make economy more productive
Investment in skills and apprenticeships
Devolution of powers and budgets
Northern powerhouse
Importance of Apprenticeships
Type of programme
L3 Apprenticeship
L2 Apprenticeship
FT Level 2
FT Level 3
Value per £ of government investment
28
26
21
16
Childcare – From September 2017, the
government will extend the free childcare
entitlement to 30 hours a week for working
parents of 3 and 4 year olds.
Apprenticeships levy – The government will introduce a
levy on large UK employers to increase the number of
apprenticeship starts. In England, employers will be able to
access this funding for apprenticeship training.
The funding will be directly controlled by employers via
the digital voucher and firms that are committed to
training will be able to get back more than they put in.
“There will be formal engagement with business on the
implementation of the levy, which will also consider the
interaction with existing sector levy boards, and further
details will be set out at the spending review.”
Student maintenance – Maintenance loan support will rise for students from
low and middle income backgrounds up to £8,200 a year studying away from
home, outside London. From the 2016-17 academic year, maintenance grants
will be replaced with maintenance loans for new students from England, paid
back only when their earnings exceed £21,000 a year.
Student loans – The government will consult on freezing the loan repayment
threshold for the next 5 years and review the discount rate applied to
student loans and other transactions to bring it more into line with the
government’s long-term cost of borrowing.
Teaching quality – The government will allow institutions offering high
teaching quality to increase their tuition fees in line with inflation from 201718, and consult on the mechanisms to do this.
Youth obligation – From April 2017, 18-21 year olds on Universal Credit will
participate in an intensive period of support at the start of their benefit claim.
After 6 months they will be expected to apply for an apprenticeship,
traineeship, gain work place skills or go on a work placement.
Extending parent conditionality – From April 2017 parents claiming Universal
Credit, including lone parents, will be expected to prepare for work from
when their youngest child turns 2, and to look for work when their youngest
child turns 3, with support from Jobcentre Plus.
Restricting Housing Benefit entitlement for young people – From April 2017,
those out of work aged 18 to 21 making new claims to Universal Credit will no
longer be automatically entitled to the housing element.
Implications of the Budget
How will the levy work? How bureaucratic? How will
employers respond? What about smaller employers?
Lots of details left to Productivity Plan and Spending Review
process
Deficit to be cut at same pace as during last Parliament means
less reliance on public services cuts
New “earn or learn” obligations
Participation in HE by low/middle income families
Devolution of investment and skills budgets to LEPs and City
Regions
Productivity
The budget provided too little detail on what the
productivity plan contains, so we must wait for the
Treasury’s Friday document for putting
some economic flesh on the bones.